The domestic shipbuilding industry is kicking off the 'Make America Shipbuilding Great Again' (MASGA) project in earnest as it signs consecutive business agreements with local companies in the United States. The agreements include collaborations by domestic companies to modernize U.S. shipyards and reconstruct equipment manufacturers.
The shipbuilding industry forecasts opportunities to enter the U.S. market as well as develop technology for Smart Yards and export it, but there are concerns about the significant expense required to secure sufficient new orders.
According to the shipbuilding industry on the 26th, HD Hyundai signed a memorandum of understanding (MOU) with U.S. Severus Capital and the Korea Development Bank to establish a joint investment program for the South Korea-U.S. shipbuilding industry. They agreed to create a multi-billion dollar investment program aimed at acquiring and modernizing U.S. shipyards, investing in equipment manufacturers to strengthen the supply chain, and developing advanced technologies such as autonomous navigation and artificial intelligence (AI).
HD Hyundai plans to support the operation of the investment program as an anchor investor and technology consultant. In particular, it will review the technical feasibility, competitiveness, and growth potential of investment targets to support investment decisions.
On the same day, Samsung Heavy Industries also established a strategic partnership with the Bigger Marine Group regarding maintenance, repair, and overhaul (MRO) support for the U.S. Navy.
Samsung Heavy Industries plans to modernize the shipyard and processing plants of the Bigger Marine Group and share its operational know-how. The company intends to solidify this plan through equity investments or joint project bidding and participate in U.S. military vessel MRO projects.
Samsung Heavy Industries aims to expand cooperation to establish a shipbuilding equipment cluster in the U.S. and a training center for skilled workers and crew members in shipbuilding. Through this, the company plans to actively promote joint construction with U.S. partner shipyards.
Hanwha Ocean has been investing in the U.S. prior to the MASGA project. The company is targeting the U.S. liquefied natural gas (LNG) market through its previously acquired Hanwha Philly Shipyard.
To this end, last month, Hanwha Ocean placed an order for LNG carriers at the Philly Shipyard through its U.S. subsidiary Hanwha Shipping and is working on building a supplier network for areas required for new construction, such as installation of equipment, machinery, and electrical systems.
Industry insiders estimate that domestic shipbuilders will invest trillions of won to rebuild the U.S. shipbuilding industry. This is because the U.S. requires cooperation in both modernizing shipyards and rebuilding the related ecosystem including parts and equipment manufacturers.
Since the 1980s, the U.S. shipbuilding industry has been in decline, with the number of shipyards dropping from about 400 to currently 21. Consequently, various equipment manufacturers have also declined, leading to a shortage of skilled workers and a collapse of the supply chain for raw materials, thus reducing productivity.
The U.S. is pursuing plans to expand the size of American-flagged merchant vessels to 250 by 2034, indicating a strong possibility of benefits from collaboration. There is potential for new orders, as well as prospects for developing, applying, and exporting Smart Yard technology.
Lee Eun-chang, a research fellow at the Korea Institute for Industrial Economics & Trade (KIET), noted that "the ecosystem of an industry cannot be created quickly and requires long-term planning" and emphasized that while domestic companies are collaborating, it is essential to generate sufficient revenue from stable orders and that tariff exemptions will be necessary when parts are supplied to the U.S.